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Market Roundup
• Japan Leading Index (Jul) 117.7, 118.1 forecast, 116.5 previous
•Japan Leading Index (MoM) (Jul) 1.5%, 1.7% forecast, 0.0% previous
•Japan Coincident Indicator (MoM) (Jul) 1.7%, 1.7% forecast, 0.6% previous
Looking Ahead Economic Data (GMT)
• 09:00 Italy PPI (YoY) (Aug) 7.8% previous
• 09:00 Italy PPI (MoM) (Aug) 2.4% previous
• 09:00 Eurozone Consumer Inflation Expectation (Sep) 33.0 previous
• 09:00 Eurozone Business Climate (Sep) -0.22 previous
• 09:00 Eurozone Selling Price Expectations (Sep) 16.4 previous
• 09:00 Eurozone Industrial Sentiment (Sep) -4.8 forecast, -5.3 previous
• 09:00 Eurozone Business and Consumer Survey (Sep) 99.0 forecast, 98.4 previous
• 09:00 Eurozone Consumer Confidence (Sep) -16.5 forecast, -16.5 previous
• 09:00 Eurozone Services Sentiment (Sep) 6.5 forecast, 5.8 previous
Looking Ahead Events And Other Releases (GMT)
• 10:00 German Buba President Nagel Speaks
•10:00 German Buba Mauderer Speaks
Currency Forecast
EUR/USD : The euro traded near three month low on Tuesday after the European Central Bank's chief signalled measured steps to quell inflation. ECB President Christine Lagarde said on Monday that this year’s inflation surge has yet to produce significant second-round effects across the euro zone, suggesting a moderate policy response remains appropriate. She pushed back against aggressive market expectations for further tightening, saying higher oil and gas prices linked to the US-Iran conflict are the main source of current price pressures. Euro zone inflation has already risen above 3% and could approach 4% by year-end, fuelling expectations of as many as four additional rate hikes over the next year after two increases this summer. Immediate resistance can be seen at 1.1450(38.2%fib), an upside break can trigger rise towards 1.1539(50%fib).On the downside, immediate support is seen at 1.1348(23.6%fib), a break below could take the pair towards 1.1308(Lower BB).
GBP/USD: Sterling slipped on Tuesday as the US dollar strengthened ahead of a data-heavy week that could provide fresh clues on the Federal Reserve’s next policy moves. The market’s focus is set to remain on key US inflation and employment indicators, particularly the PCE price index and nonfarm payrolls.The PCE report will be closely watched for signs that inflationary pressures remain persistent, while the jobs data could offer further insight into the strength of the US labour market. Stronger readings could reinforce expectations for a tighter Fed policy path and provide further support to the dollar.Meanwhile, UK Finance Minister John Healey said fiscal discipline would be a key priority in the government's October 28 budget. He warned that elevated debt-servicing costs are absorbing funds that could otherwise be directed toward public services, keeping the UK's fiscal position and borrowing requirements in focus ahead of the budget.. Immediate resistance can be seen at 1.3347(Daily high), an upside break can trigger rise towards 1.3397(50%fib).On the downside, immediate support is seen at 1.3227(Daily low), a break below could take the pair towards1.3178(23.6%fib).
AUD/USD: The Australian dollar dipped against the U.S. dollar on Tuesday after the Reserve Bank of Australia raised interest rates to a 15-year high and signaled it could tighten policy further if needed to contain persistent inflation.The Reserve Bank of Australia lifted its cash rate to 4.60% on Tuesday, the highest level in 15 years, delivering its fourth increase of the year and signaling that additional hikes remained possible to contain inflation.Australia's central bank unanimously raised rates by 25 basis points at its September meeting, taking the cumulative rate increases delivered this year to 1 percentage point. Markets had fully priced in the rate hike after July inflation exceeded expectations and renewed oil price gains heightened concerns over persistent price pressuresImmediate resistance can be seen at 0.7064 (50%fib), an upside break can trigger rise towards 0.7134(50%fib).On the downside, immediate support is seen at 0.7015 (38.2%fib), a break below could take the pair towards 0.6973(Lower BB)
USD /JPY : The U.S. dollar remained largely range-bound against yen on Tuesday as traders were cautious amid intervention risks.Japanese Finance Minister Satsuki Katayama again usined cautious language on currency movements.Katayama said Japan and the US agreed to step up cooperation in her September 25 telephone talks with Treasury Secretary Bessent.Katayama said Japan will maintain close communication with the US Treasury to help ensure stability and orderly conditions in foreign exchange markets.Japan’s currency diplomat Atsushi Mimura said on Monday that Tokyo and Washington had delivered a “very clear” message about their concerns over yen weakness, which markets should take seriously. Immediate resistance can be seen at 158.00(Psychological level), an upside break can trigger rise towards 158.48(50%fib).On the downside, immediate support is seen at 156.46(SMA 20) a break below could take the pair towards 156.13(61.8%fib).
Equities Recap
Asian shares slipped broadly on Tuesday, tracking Wall Street losses, while US Treasury yields halted their advance after touching levels last seen about two decades ago.
China A50 was down by 0.10% , South Korea’s KOSPI was down at 0.27%, Nikkei was down at 0.47 %
Commodities Recap
Gold prices rose on Tuesday after hitting a more than seven-week low in the previous session, as investors assessed Middle East developments and awaited a raft of US economic data for clues on the Federal Reserve’s policy path.
Spot gold rose 0.7% to $4,143.87 per ounce, as of 0708 GMT, after hitting its lowest level since August 5 on Monday. US gold futures gained 0.2% to $4,175.10.
Oil prices rose for a second straight session on Tuesday as lingering concerns over Middle East supply disruptions caused by the US-Israeli war with Iran outweighed signs of recovering crude exports from the region.
Brent crude futures for November rose $1.71, or 1.6%, to $106.99 a barrel at 0626 GMT, while the more actively traded Brent December contract rose $1.68 to $99.51 a barrel. Meanwhile, US West Texas Intermediate crude was at $94, up $1.4, or 1.5%.
